Fed’s Mortgage Holdings May Dampen Future Bond Sell-Offs, Fed Says

By

Al Yoon

Mar 24, 2014 4:29 pm ET

The Federal Reserve’s share of the mortgage bond market has grown so large that it is dampening the trades by other investors that could add fuel to any increase in bond yields, New York Fed economists said in a report on Monday.

The study by the New York Fed’s Liberty Street Economics team comes as investors are speculating on just how much bond yields may rise as the Fed cuts its monetary stimulus effort this year